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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: taxman who wrote (5588)	1/28/2000 10:14:00 PM
From: SJS	Respond to of 24042

Yeah....we all have those stories. I've never met anyone that didn't get called or get put when writing options. But we're at a different time, in some respects, an inflection point. You got burned by YAHOO, I got burned by JDSU. You still have to analyze the situation each and every time in the backdrop of the market and the volatility. The 280's cheap? With any other stock, they'd be a teeny. But I'd bet that lower priced one would have decent premiums (I haven't run the option model calculator to see what they are....) for those willing to take on the risk. So how high will JDSU go in 3 weeks? Once you think you can answer that question correctly then the strike price you might sell your options becomes more apparent; if you like that sort of play. Conversly, if you won't write them, would you buy them? They're certainly cheap enough. Fun mental exercises to hone your thought processes around buying or selling options. How many of you that can buy and sell options think the following (X and Y are the same for both sides): 1) When you sell: The option price of "X" I get for the "Y" strike is too little. 2) When you buy: The option price of "X" I pay for the "Y" strike is too much. Both can't be correct. Steve

To: taxman who wrote (5588)	1/29/2000 9:22:00 AM
From: t2	Read Replies (1) \| Respond to of 24042

if anything jdsu options are cheap. the premium you get for writing the option is not worth it. you don't get enough downside protection if the stock drops and if it goes up, it could go way over the strike price. i own yahoo common. with the stock at about 140 i wrote a 270 option. how could i lose? well a short time later the stock was at 500. for a six dollar premium i gave up 230 points. I guess experienced similiar fates in selling calls on Yahoo. Mine were actually close to the money and i wanted out of the stock, so instead of selling, i decided to sell at the money calls. That was my worst trade ever, even though i made money. You are right. I think this selloff is almost over. I am planning to buy March or Sept calls shortly. The calls (covered) that i was planning would have been only for FEB expiration due to the news vacuum. I actaully feel we could get our s and p announcement soon because the committee would realize that now is the best time to get this very high market cap stock out of the way instead of risking adding it when the market cap is over 100 billion.